Credit life or disability insurance is:
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A. B. C. D.A
Credit life or disability insurance is a type of insurance that pays off all or part of a borrower's outstanding debt if the borrower becomes disabled or dies. The insurance policy is typically purchased at the same time as the loan, and the premiums are usually included in the loan payments.
The purpose of credit life or disability insurance is to protect the lender from the risk of default due to the borrower's disability or death. If the borrower becomes disabled or dies, the insurance policy pays off the outstanding loan balance, which reduces the risk to the lender.
Option A, which states that the coverage decreases at the same rate as the loan balance, is incorrect. This type of insurance is called decreasing term life insurance, which is a type of life insurance in which the coverage decreases over time as the insured person ages. The premium remains the same, but the death benefit decreases over time.
Option B, which states that the coverage increases at the same rate as the loan balance, is also incorrect. This type of insurance is called increasing term life insurance, which is a type of life insurance in which the coverage increases over time as the insured person ages. The premium remains the same, but the death benefit increases over time.
Option C, which states that the coverage decreases at an inverse rate as the loan balance, is also incorrect. This type of insurance does not exist, and the term "inverse rate" is not applicable in this context.
Option D, which states that the coverage decreases at half the rate of the loan balance, is also incorrect. This type of insurance does not exist, and the term "half rate" is not applicable in this context.
Therefore, the correct answer to the question is none of the above. Credit life or disability insurance is a type of insurance in which the coverage remains the same throughout the life of the policy, and the premiums are typically based on the borrower's age and the amount of the loan.